This
case concerns the sale of reclaimed coal at a defunct
Mississippi power plant. Presently before the Court is the
motion of Plaintiff for default judgment and the motion of
Defendant to vacate default and dismiss Plaintiff's
complaint. For the reasons expressed below, Defendant's
motion will be granted, and Plaintiff's motion will be
denied.

BACKGROUND

Plaintiff,
Exporting Commodities International, LLC (“ECI”),
filed a complaint[1] for breach of contract and other related
claims against Defendant, Southern Minerals Processing, LLC
(“SMP”), for SMP's alleged breach of the
parties' agreement that ECI purchase the remaining coal
stockpile at a closed power plant owned by Mississippi Power.
ECI is involved in the sale and distribution of bituminous
coal, and SMP is a seller of coal. According to ECI, SMP had
an agreement with Mississippi Power to sell the coal to a
third party, and SMP would pay a royalty to Mississippi Power
based on that sale.

ECI
claims that in “late 2015, ECI began discussing with
[SMP] the possibility of buying and then reselling reclaimed
coal from Mississippi Power, ” with an estimated
recoverable quantity of 150, 000 tons. ECI and SMP
“began exchanging information including, but not
limited to, project status and the quality of the material in
December 2015.” In April 2016, ECI began discussions
with Uniper, a potential buyer for the coal.[2] ECI claims that
it received a formal bid from Uniper, and ECI verbally
communicated this bid to SMP.

ECI
claims, “After ECI and [SMP] engaged in negotiations
regarding the purchase of the reclaimed coal located at
Mississippi Power, on the morning of July 22, 2016 at 9:35
a.m., ECI sent an email to [SMP] confirming the material
terms of the agreement reached between the parties.”
The email ECI sent to SMP provided, “We are pleased to
confirm the following deal between Exporting Commodities
International, LLC (Buyer) and Southern Minerals (Seller) as
follows . . . . Sometime next week, I will send a draft
contract, which shall be this confirmation plus terms and
conditions.”

That
same morning at 11:49 a.m., ECI claims that SMP
“confirmed via email that it accepted ECI's
proposal for the purchase of the reclaimed coal (the
“Contract”).” The email sent from SMP to
ECI provided, “Everything looks good from our
standpoint. We accept you [sic] proposal and look forward to
doing business with you.” That afternoon, ECI claims
that after SMP “had confirmed the Contract between the
parties, ECI entered into a contract with Uniper to purchase
the reclaimed coal that ECI was buying from [SMP].”

ECI
claims that at 5:00 p.m. on that same day, Frank Kolojeski, a
representative of ECI, received a call from Brandon Hodges,
the owner of SMP, “claiming that a third party had
approached [SMP] with an offer to buy the reclaimed coal at
Mississippi Power at a substantially higher price than the
Contract reached between ECI and [SMP].” According to
ECI, Hodges told Kolojeski that he was in a
“‘quandary' as to what to do because [SMP]
wanted to take the higher price being offered by the other
third party.”[3] ECI claims that Kolojeski told Hodges that
“the parties had reached a deal for the sale/price of
the reclaimed coal and that ECI and [SMP] had a legal binding
agreement, ” and that ECI had already entered into an
agreement to resell the coal to Uniper. ECI claims that
despite repeated requests and demands, SMP has failed or
refused to ship the coal to ECI, and ECI is still obligated
to ship the coal to Uniper.

As a
result, ECI claims that SMP's actions have breached the
parties' contract, breached the covenant of good faith
and fair dealing, constitute unjust enrichment, and implicate
the doctrine of promissory estoppel.

ECI has
filed a motion for default judgment against SMP, while SMP
has objected to the entry of default against it, opposed
ECI's motion for default judgment, and lodged a motion to
dismiss ECI's complaint, primarily on the basis that
ECI's complaint should be dismissed for lack of personal
jurisdiction. Thus, the procedural history of this case is as
relevant to the pending motions as the claims in ECI's
complaint.

ECI
filed its complaint on December 8, 2016, but due to an
improper signature, ECI was directed by the Clerk's
office to resubmit the complaint. ECI filed an amended
complaint with a proper signature on December 9,
2016.[4]

On
January 4, 2017, ECI filed an affidavit of service,
indicating that it served SMP with the summons and complaint
on December 24, 2016.[5] On that same day, counsel for SMP entered
his appearance.

On
February 23, 2017, ECI filed a revised affidavit of service.
On March 6, 2017, ECI requested the entry of default, which
the Clerk granted on the same day. Later that day, SMP filed
an objection the Clerk's entry of default against it,
noticing its intent to file a motion to dismiss for lack of
personal jurisdiction and insufficient service of process,
among other grounds. SMP also objected to the entry of
default because the record did not indicate that ECI had
effectuated proper service.

On
April 19, 2017, ECI filed its motion for default judgment.
Two days later on April 21, 2017, SMP filed a motion to
dismiss.[6] On May 1, 2017, SMP filed a motion to
correct its motion to dismiss, seeking to also set aside the
Clerk's entry of default.

On May
10, 2017, the Court issued an order to show cause, finding
that ECI failed to properly allege the citizenship of the
parties, specifically as to pleading the citizenship of the
two limited liability companies. The Court directed that ECI
file an amended complaint with the citizenship properly
averred, or the complaint would be dismissed for lack of
subject matter jurisdiction.

On June
2, 2017, ECI complied with the Court's order, and filed
what is now its second amended complaint and the operative
pleading, which concretely establishes the complete diversity
of the parties. On June 7, 2017, the Court ordered that the
parties' pending motions would be deemed filed as to
ECI's second amended complaint. The parties have opposed
each other's motions.

DISCUSSION

A.
Subject Matter Jurisdiction

This
Court may exercise subject matter jurisdiction over the
action pursuant to 28 U.S.C. § 1332 because there is
complete diversity of citizenship between the parties and the
amount in controversy exceeds $75, 000. ECI is a citizen of
New Jersey, Germany, and Spain; SMP is a citizen of Alabama.

B.
Analysis

1.
ECI's motion for default judgment

Federal
Civil Procedure Rule 55 governs the entry of default and
default judgments. “When a party against whom a
judgment for affirmative relief is sought has failed to plead
or otherwise defend, and that failure is shown by affidavit
or otherwise, the Clerk must enter the party's
default.” Fed.R.Civ.P. 55(a). After the Clerk's
entry of default, a plaintiff may seek default judgment, by
either applying to the Clerk if plaintiff's claim is for
a sum certain, or by applying to the Court. Fed.R.Civ.P.
55(b)(1), (2). Rule 55(c) provides that the Court may set
aside an entry of default for good cause, and it may set
aside a final default judgment under Fed.R.Civ.P. 60(b).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
same three factors govern whether a default judgment should
be entered, and whether a default or default judgment should
be set aside: 1. Whether the plaintiff will be prejudiced; 2.
Whether the defendant has a meritorious defense; and 3.
Whether culpable conduct of the defendant led to the default.
Feliciano v. Reliant Tooling Co., Ltd., 691 F.2d
653, 656 (3d Cir. 1982) (quoting Farnese v.
Bagnasco, 687 F.2d 761 (3d Cir. 1982)) (explaining that
the factors to be applied for entering and vacating default
and default judgment are the same, but further explaining
that “[l]ess substantial grounds may be adequate for
setting aside a default than would be required for opening a
judgment”). It is the Court's discretion to grant
default judgment or set aside default or default ...

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